News TSMC and Broadcom explore deals to rip apart Intel's foundry and chip design wings, says report

[KyaraM]

I remember 15 years ago when Intel were so arrogant, max prices, minimum cores.
Scamming the consumers by segmenting features such as ecc mem and scamming the enterprise world with xeon chips that were sold more than gold price.

To see them in this soon to be dead situation with vultures flying around is a delight to see.

I think that if gov helps them, they should get shares in exchange.

Imagine being so blinded by your own hate that you apparently cannot see the dangers of a monopoly anymore. Newsflash, neither a TSMC nor an AMD monopoly would be desirable. Anyone who thinks they are any better at all is delusional. They are all companies. Companies want maximum profits. End of story.

 

[bit_user]

With the threat to Taiwan, there is a scenario where TSMC Taiwan ceases to exist and becomes a US company. If administration believes that threat likely enough, they may not oppose an Intel fab buyout if it means better tech on US soil.

It won't work out like that, because all of TSMC's R&D now happens in Taiwan. You can't possibly transplant those operations and a meaningful number of those people to the US, without a major disruption to their R&D pipeline. And don't think that would be logistically feasible during any kind of conflict, nor would there be sufficiently clear warning signs far enough in advance to do it ahead-of-time.

This highlights another reason why it's bad to have TSMC parachute into Intel's fabs - because even though the production capacity would be on US soil, they would become dependent on Taiwan for R&D.

 

[jp7189]

It won't work out like that, because all of TSMC's R&D now happens in Taiwan. You can't possibly transplant those operations and a meaningful number of those people to the US, without a major disruption to their R&D pipeline. And don't think that would be logistically feasible during any kind of conflict, nor would there be sufficiently clear warning signs far enough in advance to do it ahead-of-time.

This highlights another reason why it's bad to have TSMC parachute into Intel's fabs - because even though the production capacity would be on US soil, they would become dependent on Taiwan for R&D.

Good points. Though no reason why they can start spinning up more R&D in the US over time to mitigate impact.

It's likely TSMC's process won't work well at Intel fabs, but it's unlikely shareholders think that.

 

[TerryLaze]

TSM market cap $1T, INTC $100B. With a 10x market cap they can easy propose an all stock buyout while barely breaking a sweat.

LOL.
Not even sure if you are being serious right now....
TSMC owns like 12% of their stock shares, they would have to give intel ALL of their stock to buy them out which would mean that intel would then own TSMC, well, at least as much as TSMC owns TSMC right now.
Going by your only stocks theory anyway.
But as I say in the post you quoted, they would have to pay all the assets and that is the very least if intel really had enormous money problems and would let it go at cost, that's still roughly twice as much as what TSMC has as stocks.

I also have no idea if either company has given out 100% of their company as shares or if there is a part that still belongs to...whoever.
https://www.tipranks.com/stocks/tsm/ownership

 

[jp7189]

LOL.
Not even sure if you are being serious right now....
TSMC owns like 12% of their stock shares, they would have to give intel ALL of their stock to buy them out which would mean that intel would then own TSMC, well, at least as much as TSMC owns TSMC right now.
Going by your only stocks theory anyway.
But as I say in the post you quoted, they would have to pay all the assets and that is the very least if intel really had enormous money problems and would let it go at cost, that's still roughly twice as much as what TSMC has as stocks.

I also have no idea if either company has given out 100% of their company as shares or if there is a part that still belongs to...whoever.
https://www.tipranks.com/stocks/tsm/ownership

Yeah.. sucks that intc is valued at less than their total assets, but that just increases the attractiveness to a buyer and also indicates a better outcome for shareholders of intc. Speaking of which, if Intel could get full value by liquidating their assets, then it means it's more attractive to do that than remain in operation. That's if all this was just about financial gain which thankfully it isn't.

 

[TerryLaze]

Yeah.. sucks that intc is valued at less than their total assets, but that just increases the attractiveness to a buyer and also indicates a better outcome for shareholders of intc. Speaking of which, if Intel could get full value by liquidating their assets, then it means it's more attractive to do that than remain in operation. That's if all this was just about financial gain which thankfully it isn't.

The amount of shares in the wild is not how much a company is valued at.
Stocks are just private entities making money off of a company after the company made money from selling off part of their company as shares.

TSMC or anybody could buy up all existing shares and would not change anything about the ownership of intel as it is today because the existing shares already don't belong to intel.

 

[jp7189]

The amount of shares in the wild is not how much a company is valued at.
Stocks are just private entities making money off of a company after the company made money from selling off part of their company as shares.

TSMC or anybody could buy up all existing shares and would not change anything about the ownership of intel as it is today because the existing shares already don't belong to intel.

Here's a rough example.. tsm is $200/share and intc is $25. If the buyout terms offer to swap 1 tsm per 4 intc (double the current value of an intc share) what intc shareholder would say no? The problem is tsm would have to do a special issue of new shares to make the deal happen which dilutes the existing shareholder's stock. Tsm shareholders would only agree to this if the combine organization is worth it (in assets and projected future earnings, etc.).

 

[TerryLaze]

The problem is tsm would have to do a special issue of new shares to make the deal happen which dilutes the existing shareholder's stock.

The problem is you don't know if tsmc has any new shares to issue, for all we know that 12% might be all that tsmc owns of tsmc.
Also it wouldn't dilute anything, there would just be more shares in the open market. If tsmc had to sell those shares there would be a small danger of nobody wanting to buy them at the current price which could have bad things happen, but in an direct transfer to intel that would be a non issue.

But again you are talking about the available intel shares in the open market,
THOSE ALREADY DON'T BELONG TO INTEL.

What you are talking about is how big companies do mergers, by swapping out shares that are not public but the ones that belong to the actual owners of the companies.

 

[jp7189]

The problem is you don't know if tsmc has any new shares to issue, for all we know that 12% might be all that tsmc owns of tsmc.
Also it wouldn't dilute anything, there would just be more shares in the open market. If tsmc had to sell those shares there would be a small danger of nobody wanting to buy them at the current price which could have bad things happen, but in an direct transfer to intel that would be a non issue.

But again you are talking about the available intel shares in the open market,
THOSE ALREADY DON'T BELONG TO INTEL.

What you are talking about is how big companies do mergers, by swapping out shares that are not public but the ones that belong to the actual owners of the companies.

If you own any stocks, I'm sure you get voting ballots all the time to weigh in on decisions that affect shareholder value. Its nonsense to say there are no new shares to issue... thats exactly what would be done... create brand new shares from thin air for the purposes of financing a buyout.. which results in dilution. If that motion is put forth, and you currently hold shares with voting rights, then you would recieve a ballot to cast a vote for or against the action. Your vote would (likely) be based on whether you believe the new org would have more future value despite the dilution.

Also, it doesn't matter about available intc shares on the open market. All existing shareholders (with voting rights) will be presented an offer to swap their intc for an amount of tsm, and they would vote based on their belief of the value of the proposed deal.

You may be thinking of a hostile takeover where an entity tries to acquire the majority of voting shares so they can approve whatever they want without considering other's interests.. and you're right in thinking that's extremely unlikely in this scenario.